Guidewire Software (GWRE) Benefited from the Business Model Transition

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Investor sentiment at the beginning of 2025 was positive. In 2024, US equities once again outperformed their global counterparts, and there was optimism that the new Republican administration would strengthen the idea of US exceptionalism. However, the first quarter did not meet those expectations. In the quarter, its Investor Class fund ARTSX returned -10.14%, Advisor Class fund APDSX posted a return of -10.10%, and Institutional Class fund APHSX returned -10.07%, compared to a return of -11.12% for the Russell 2000 Growth Index. Markets experienced weakness due to rising fiscal and geopolitical uncertainties during the quarter. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its first-quarter 2025 investor letter, Artisan Small Cap Fund highlighted stocks such as Guidewire Software, Inc. (NYSE:GWRE). Guidewire Software, Inc. (NYSE:GWRE) offers a platform for property and casualty (P&C) insurance companies. The one-month return of Guidewire Software, Inc. (NYSE:GWRE) was 3.08%, and its shares gained 101.39% of their value over the last 52 weeks. On June 2, 2025, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $215.24 per share with a market capitalization of $18.054 billion.

Artisan Small Cap Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its Q1 2025 investor letter:

“Among our top Q1 contributors were Ascendis, Halozyme and Guidewire Software, Inc. (NYSE:GWRE). Guidewire is a market leader in next generation property and casualty (P&C) insurance software. A few years ago, Guidewire transitioned from a licensed software business model to a subscription-based cloud service. As companies emerge from these (often messy) transitions, their profit growth tends to accelerate. We believe Guidewire is at this inflection point. During Q1, the company reported strong earnings results, while management said it signed 12 new cloud deals and raised its forward guidance.”

Why Guidewire Software Inc (GWRE) is Skyrocketing So Far in 2025?

An insurance adjuster reviewing images and paperwork to process a claim.

Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the first quarter, which was 60 in the previous quarter. Guidewire Software, Inc. (NYSE:GWRE) generated revenue of $289 million in the second quarter of fiscal 2025, marking a 20% increase from last year’s comparable quarter. While we acknowledge the potential of Guidewire Software, Inc. (NYSE:GWRE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Guidewire Software, Inc. (NYSE:GWRE) and shared Baron Focused Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.